Columbia Dean May Be Tapped

Former adviser to Bush with Harvard Ph.D. in the running for top Fed post

Hubbard, third from left, joins President George W. Bush, Vice President Dick Cheney, far right, and two senior economic advisers, in the White House Rose Garden in Washington on October 5, 2001.

When R. Glenn Hubbard was growing up in central Florida, few people would have foreseen that he would become one of the nation’s leading economists.

The son of English teachers and the brother of a country-pop musician, Hubbard has defied the odds, serving as the chairman of Council of Economic Advisers (CEA) during the first two years of the Bush administration and holding the post of dean at Columbia’s Graduate School of Business since last year—all before his 50th birthday.

A high-flying college student at the University of Central Florida (UCF), Hubbard went on to Harvard, where he received a Ph.D. in economics. He has taught at several of the nation’s top schools and has worked in the Department of the Treasury and the White House.

“It looks like he was born and bred in Cambridge, but that’s absolutely not true,” remarks New York University Economics Department Chair Mark Gertler, a longtime friend and colleague. “He was born and bred in Florida, and his brother is a country music star.”

Hailed by economists as one of the most influential CEA chairmen in recent history, Hubbard is now among the leading candidates to replace Federal Reserve Chairman Alan Greenspan, who is set to retire on Jan. 31, 2006.

While Hubbard declined to be interviewed for this profile, his colleagues and friends say he would likely continue the Fed’s commitment to low inflation while bringing a leadership style marked by loyalty.

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At the CEA, Hubbard became renowned for his academic orthodoxy, his advocacy of tax cuts, and his loyalty to the administration.

Hubbard promoted abolishing taxes on capital investment—effectively creating a tax system centering on consumption instead of on savings and investment.

He was the driving force behind Bush’s controversial $674 billion tax cut package designed to promote economic growth, which included an end to the double taxation of dividends that corporations pay their shareholders.

He also is an outspoken advocate of reduced federal spending, including substantially slowing the growth of Social Security and Medicare expenditures.

At the helm during the Sept. 11 terrorist attacks and the economic recession, Hubbard also gained a reputation for his loyalty to the president. When Bush dismissed his first Treasury secretary and his top economic adviser early in his first term, Hubbard was kept on board.

Hubbard praised the Federal Reserve’s recent performance—its “commitment to price stability” and it “remarkable job in cutting the inflation tax on investment”—in a column he wrote for Business Week in January.

“The Fed’s victory over inflation constitutes what is, in effect, the biggest tax cut for investment over the past two decades,” he wrote.

Hubbard also stressed the importance of communication to the Fed’s success.

“Explaining to the public the costs of even modest rates of inflation is a vital part of Fed communication,” he wrote.